Energy policy should not be about playing favorites

Longworth’s understanding of market forces and government’s proper place therein have not been much in evidence in our nation’s capital; especially when it comes to energy policy, where playing favorites has become a common pastime on Capitol Hill.

In the late 1970s, it was the Carter Administration’s miserably misguided attempt to push solar energy and “synfuels.” More recently, it is the continuing effort to force ethanol into Americans’ gas tanks. And, of course, we have the Solyndra scandal. Washington regulators and legislators exhibit an irresistible urge to tinker with energy production and markets as a way to better meet our energy needs; and they inevitably make things worse, not better.

The latest move in this game of “Let’s Play Favorites!” is the “New Alternative Transportation to Give Americans Solutions Act” (known to Washington insiders by its clever acronym, the “NAT GAS Act”). Democratic leaders in the Senate and House, including former Speaker Nancy Pelosi, support the bill, as does the Obama Administration. If enacted, NAT GAS would limit, rather than expand, our country’s energy options at a time when it is vital to do precisely that.

The problem is not that natural gas is not an important component of America’s energy strategy; it is, and needs to remain so. The problem with NAT GAS is that it attempts to artificially skew the market in favor of one energy source over others.

The Obama Administration, like virtually every administration before it, claims only to be “leveling the playing field” in all that it does, including in matters relating to energy policy. And, like every other administration – Republican or Democrat – the real goal is not to promote fairness and objectivity in federal tax or regulatory policies; but to favor one industry or component over others -- in this case, natural gas. This is not good policy generally, and in this instance, is neither necessary nor productive.

The natural gas industry in America is healthy; as are the two other major sources of energy consumed by American families and businesses – coal and petroleum. All three of these “legs” of the energy “stool” need to be supported, promoted, and treated fairly. Only by pursuing a balanced approach can we as a nation hope to progress toward a higher degree of energy independence – a goal that cannot be reached by playing favorites through legislation such as the NAT GAS Act. (That favoritism is reflected also in new regulations issued by the Environmental Protection Agency, which make it much more costly for coal-fueled power plants to be built than those using natural gas.)

Energy is not a zero-sum game; and twisting our tax laws, as NAT GAS would do, for example by artificially enticing truck manufacturers to install engines that consume natural gas rather than petroleum-based fuels, moves one energy source to the front of the class at the expense of others. There is plenty of room on the energy train for all three top energy sources, and each of these products has in fact made great strides in recent years to improve its extraction and refining capabilities. None of the three needs special tax treatment to continue responsibly producing fuels to meet America’s energy needs; all three would benefit by reducing their common tax burdens.

As the Heritage Foundation testified last August on this very subject, the way to solve America’s energy needs is not to untie the hands of a single preferred industry and leave the tax and regulatory shackles on others. The goal should be to lessen the tax burdens on all players. In this way, all of the Big Three – coal, petroleum and natural gas – can compete more favorably, create more jobs and increase GDP. This maximizes energy production and offers a win-win rather than a zero-sum result.